California requires that all contractors, including specialty contractors such as fencing, roofing, tiling, painting, solar, landscaping, and insulation contractors, be licensed by the Contractor State License Board (“CSLB”). Specifically, “It is illegal for an unlicensed person to perform contracting work on any project valued at $500 or more in labor and materials. Besides being illegal, unlicensed contractors lack accountability and have a high rate of involvement in construction scams. They also are unfair competition for licensed contractors who operate with bonds, insurance and other responsible business practices.” (CSLB website) The CSLB has set up the State-Wide Investigative Fraud Team to monitor and combat illegal activity by conducting stings and sweeps of construction sites, often operating in conjunction with other state agencies dedicated to combating underground activity.
What can you do to protect yourself from unlicensed contractors? Ask to see a copy of the license held by your potential contractor. Then, check the status of the license with the CSLB at http://www.cslb.ca.gov/Consumers/HireAContractor/ to make sure that all required insurance is in place and that the license is current. Make sure that your contractor obtains all the necessary permits and inspections. Have your attorney review the contract presented to you by the contractor before you sign or pay any money. There are many other tips in vetting your contractor provided on the CSLB website.
What if you find that your contractor was not licensed and the work performed is not up to par? Complaints against all contractors, licensed or unlicensed, can be filed on the CSLB website. CSLB will determine if your complaint warrants further investigation, and they do not guarantee restitution. If you are interested in restitution, you should consult with your attorney. Business and Professions Code §7031 provides that, with certain exceptions, “a person who utilizes the services of an unlicensed contractor may bring an action… to recover all compensation paid to the unlicensed contractor for the performance of any act or contract.” In other words, under the right circumstances, you may be entitled to a full refund of all payments made to an unlicensed contractor, not just an award to compensate for the portion of work not properly performed.